Category Archives: Business

Sometimes people get so wrapped up in tactics that they try to make one tactic fit all strategies. Two articles and a phone call this week reminded me of this. And, also, a project I am currently working on, but more about that later.

OK, here’s a story about the importance of using myths, or stories, to market product. Yeah, I know, the idea of Las Vegas as a myth is not exactly a big “eureka!” moment, but it does demonstrate that even in a fantasy town marketers need to be reminded of the importance of the myth in the marketing process.

Las Vegas “whales”, as big gamblers are known in Las Vegas, come to town on Chinese New Year to celebrate and they celebrate in a very big way. Part of the celebration is showing, and enjoying, their success, and that involves having the best of everything, including the best food and drink. In keeping with that theme, Las Vegas restaurants look for something special and expensive to serve, something that is not easily found anywhere else in the world, and at the moment that product is sake.

Sake suppliers and restaurateurs have rediscovered that a great story sells higher priced product, so they now have stories about all their sake. Some stories parallel Hollywood movies:

strains of rice that were thought extinct until small batches were discovered and saved with new growing techniques – Jurassic Park

the prodigy sake brewer (yes, sake is brewed, like beer) raised from a young age to become a master and carry on a tradition – Kung Fu Panda

the ancient sake company, around for over 800 years, that is saved by the new owner – The Santa Clause

Yes, these are ridiculous movie comparisons. But that’s the point, they develop and use the myth to enhance the product. When myth is not enough, there are special names evocative of Asian philosophy and poetry: Ice Dome, Devine Droplets, Ancient Beauty.

There is really nothing new here, the Las Vegas crowd is just applying standard marketing techniques to create and enhance brand image in a commodity market. Rosser Reeves invented the Unique Selling Proposition (USP) in the 1940’s to help focus attention on finding the most important product attribute and then build the myth on that attribute. Patent medicine peddlers of the 1800’s crowed about all the ills their miracle would cure and regularly cured someone in the crowd of their infirmities.

We can all take a lesson on this and look at how we market our most mundane products. There is always something special about “our” product and we can find the myth that supports our brand over all other brands.

There is a lesson for small and local businesses in this change at Starbucks.

First, starting July 1, 2010, WiFi service at Starbucks will be free. This move reinforces the neighborhood/community aesthetic at the heart of Starbucks’ marketing. The free model follows a trend already instituted at most airports and many other public spaces. Moving to a for-pay model is a disconnect in the “public plaza” feel Starbucks customers expect, especially after experiencing the free model outside the Starbucks store door.

This is the second step to free WiFi service at Starbucks, a couple of years back they shifted from a pure for-pay model with T-Mobile to ATT with a model featuring two-hours free daily with a registered Starbucks card and small service charge following the first two hours in a day. Granted, that’s not an expensive proposition, but just typing it cramped my fingers and it confuses many less technically comfortable customers. This change is much easier for customers to understand and act on.

Second, a new Starbucks Digital Network will be introduced later this fall. A partnership with Yahoo! and featuring free access to paid sites such as the online Wall Street Journal and other premium sites, the Starbucks Digital Network offers a new reason for Starbucks to be the preferred choice for customers. McDonald’s wired up 11,000 of their restaurants in 2009 and offered free access to customers and McDonald’s coffee business is major competition to Starbucks, so this new Starbucks access model is probably a response to McDonald’s marketing.

Main Street businesses are always looking for a way to build loyal customer relationships and gain an edge over their competition. Small businesses can use this example from Starbucks as a guide for another way to find a way to differentiate themselves from their competition. Of course, a small business will probably not get the national or international news coverage nor will they probably be able to swing a deal with Yahoo! or other major corporations to present exclusive offerings, but small businesses can find equally enticing draws for their local customers.

Yep, once again the Super Bowl stuffed us with new ads: Betty White and Abe Vigoda took turns getting stuffed on the playground gridiron: Budweiser vacillated between celebrating their brand’s glorious past with another Clydesdale ad, and it was nicely done, and celebrating the dumbest party scenes imaginable with Bud Lite (full disclosure: Bud Lite is my favorite summer beer for closing out weekend chores in hot weather, the main advantages being that it is cheap and watery); and Danica Patrick helped GoDaddy.com dose us with really low level sexual humor.

But two ads stand out in my mind as something special and, even though the ads are built around huge brands, they teach what small business can do in advertising; David Letterman and Google.

Why Google?

This is simple, and that is the Google ad’s strength. Google told us a story, a very familiar love story, and demonstrated how their product helped this story happen. With only a simple music track and some background sounds (check the baby giggle at the end of the ad), a quiet track compared to the rest of the overblown loud ads, Google told the story through the search field of their own home page. They kept their brand in front of the audience during the entire commercial and showed how their suggested search terms lead the protagonist through an entire love story, first meeting through married-with-kids, set in Paris. The whole ad demonstrated Google’s effort on keeping things simple, staying centered on search, and on being relevant.

Google’s ad was an obvious response to Microsoft’s Bing ads showing how Google’s search can bring up too broad a response. Google showed how that broad response can bring serendipity. What will be important is seeing whether Google will follow this up with more advertising to counter the Bing ads, one ad will not hold back the tide (Apple’s “1984” ad notwithstanding).

Why David Letterman?

Because each ad for these two large brands worked on a human scale, they told a story, and they were smart.

Personally, I am no fan of David Letterman’s humor. I am more of a Leno-O’Brien-Fallon kind of guy, I like the positive. To me, Letterman just has too much of a nasty side to his humor. But this ad was smart, it used surprise, and it used a pretty negative situation and turned that into a positive. Jay and Oprah appeared with Dave, they even appeared on the same couch.

My wife and I looked at each other in shock and swore that Oprah and Jay were celebrity lookalikes, but that theory was dashed almost immediately after the game when a promo came on confirming that all three people were the real item and not dubbed or faked in any way. Jay and Dave together on the couch, after the internecine war when Dave was passed over to Jay almost 20 years ago, still passing barbed comments with Oprah, the queen of togetherness, sitting frustrated between them.

Who wins with this ad? Everyone. David Letterman wins by having himself linked with Oprah and Jay while he is sitting atop the heap of late night television (although Conan was giving him a good run for his money that last two week before he bowed out of NBC and the Tonight show). Oprah wins because she is winding down her show and preparing for some future that will probably not involve her sitting on an island counting her billions, she is too motivated and engaged to waste her time lounging around (I am waiting to her about her second act). Jay wins because he got great publicity on the competing network that might help pull back some of the audience NBC lost with their business-busting moves.

Dockers and CareerBuilder.com. Really guys? The best you both can come up with is people in their underwear? Seems like both creative teams got lost on the No Pants Day public transit movement. At least the creative teams have not seen a Naked Bike Ride (no link, too NSFW, but you can Google it).

Intel. A sad robot? What about the other sad robot commercial that appeared about an hour later? I forget what the second sad robot advertised, but it was a complete parallel.

Punch Buggy? Gee, when I was a kid the VW Beetle was called a ” slug bug”, and for good reason since it came stuffed with some 40 horses in the trunk. Actually, I liked the ad and I think it communicated the brand pretty well, but where did this punch buggy term come from? Maybe it’s one of those “Hellman’s” versus “Best Foods”, or “soda” versus “pop”, geographical differences.

Oh, yeah, that was a great Super Bowl, too. I actually watched the whole thing through without switching channels this year!

Small business marketing can be tricky, it needs to reach your customers quickly and easily without costing an arm and a leg. Twitter, no matter what the buzz you’ve heard, is a great communication tool that can help you with marketing and sales. Here’s why:

1. Most business is small business.
More than 99% of business in the U.S. is small business, defined by the SBA as under 500 employees (more staggering, the percentage is actually 99.7%). But 500 employees is a really large business in most of our eyes, so a more important number for this discussion is that over 98% of businesses in the U.S. have fewer than 100 employees. Mike Clough, a serial entrepreneur and SCORE consultant, has a very readable blog post that helps parse the dense SBA figures (and you might want to read Mike’s blog on a regular basis).

Why are these numbers important? They show that if Twitter can be used in business, and I’ll write more later on businesses using Twitter, then the overwhelming majority of businesses using Twitter will be small businesses.

2. Your customers are using Twitter.
And more will begin using it this week. According to Nielsen, Twitter grew 1382% between February 2008 and February 2009, rapidly expanding from less than a half-million to over 7 million users. The overall numbers are still small, but this growth rate means over 91 million people using Twitter next February.

Twitter users are not kids. Better yet, the sweet spot of Twitter use is in the 35-49 age group, this group represents roughly 42% of all Twitter users and the core age group of the working world. This number will definitely change as Twitter use continues to grow, but it is an important age group for small business sales.

3. Your competitors are probably using Twitter and they are talking to your customers.
Come one, you already know this. When was the last time you tried some marketing or sales activity and you didn’t find out or know that a competitor was already doing this? The boom in Twitter business use followed the boom in Twitter users, it’s an organic growth curve, but you can still get started now.

The New York Times recently covered business use of Twitter and mentioned some small retail business uses along with the typical array of large corporations, but they left out the backbone of American business. They left out the business-to-business, industrial/commercial aspect of business. Twitter talks to and through your distribution chain, reaching your reps, distributors, and retailers, as well as your end customers, affecting end-to-end marketing along your entire distribution chain, no matter how many tiers and branches in that chain.

4. You can extend customer loyalty.
There’s a period following the purchase process where the customer becomes loyal to your product or company. Continuing that loyalty can be hard for small businesses, especially when repeat business is spread over longer periods. You can use Twitter can keep customers in the loop on your product or service, keeping them in a positive purchase state long after the sale is complete, possibly through to the next sale. And the word-of-mouth

Even better, it doesn’t matter whether your customers are local or geographically dispersed. Your regular sales skills are the main requirement in Twitter, the same as the conversation on the phone or in the office. One good difference is you can reach multiple customers at one time and then handle individual conversations through other methods appropriate to the customer need.

5. You determine how much time you spend using Twitter.
Twitter use grows organically, it is a self-defining use responding to the conversations surrounding your business. Yes, there is the group that tweets what they had for breakfast, but far more serious questions and discussions also happen on a minute by minute basis. Finding these discussion depends on your customers and their habits, but the best place to start finding them and listening to their discussions is by using a form of search.

Use TweetDeck or Seesmic, desktop applications that will continually track and report uses of searchable terms used in your business. Or use TweetBeep to get search term uses emailed directly to you (be careful with TweetBeep, it’s great for lower search activity but can overwhelm your email inbox if a search term is heavily used). These tools can get you started effectively using Twitter in business, but there are many other methods as well.

So that’s five reasons to start using Twitter today. There are many more reasons, but they will be specific to your business needs, feel free to comment here or email me with specific questions and I’ll try to give you some quick general answers to your possible uses.

OK, the word “exploit” may have a charged meaning to some people, especially in light of the recent CNET article by Chris Matyszczyk discussing a presention by Danah Boyd, of the Harvard Berkman Center for Internet and Society, on how organic demographic separations appear in groups using technology.

Danah’s speech, given to the Personal Democracy Forum, was intended to deflate the somewhat rosy view that technology is a great demographic equalizer, and she used a comparison of Facebook and MySpace users as an example. According to Danah, Facebook users tend to be higher income, higher educated, and racially separated (white) from My Sapce users (lower income and education, non-white). She spends lots of time in her speech differentiating between the two groups. Chris asks, “Do we care?”

I think we do care and here’s why: From a marketing perspective, we need to reach our audience, so understanding the differences and exploiting those differences is important to our business operations. Rather than bemoan the fact that people search and choose their online community, or not caring that there are differences online, we should celebrate those differences and work to meet those differing audiences on their terms.

This is something that large corporations do in traditional media purchases and we can put this to good use for small business in new media. Rather than commiserate over the differences in audience, we can use the differences to more effectively market our products and services to different market segments.

If I want to reach a market segment that tends to have higher education and a suburban lifestyle, then Facebook may be a good choice for my marketing strategy. But if I focus my products and services on a more urban group, a group that spends more social time with new music, then MySpace might be the answer to reaching my core audience. I already notice this effect in pro-bono work I do for a small dance company, Facebook generates better response and greater interest than MySpace delivers. There are many communities outside of Facebook or MySpace, and other examples of this differentiation that we can also exploit.

Now for the caveats. There are many ways to slice this demographic inforation and none of them are perfect matches. There are no hard and fast rules, and no specific quantitative research. Also, things change swiftly in the online world and what is currently true may be completely false and ineffective in a mater of months. But the point is that by carefully considering our audience we can match our message to the environment and the audience to gain the greatest efficiency of effort.

The question of whether or not technology is the great equalizer is a valid discussion, but it is not a marketing question. Our only marketing question is “are we reaching the right audience with the right message?” Anything else is neglecting our business.

Yesterday’s announcement by Hertz that they are moving into the local hourly car rental business represents a big shift by a large enterprise (pun unfortunate, but intended) that will heavily affect some smaller businesses.

This is an excellent example of an elephant shifting strategy. Hertz, known for decades as a car rental company for out of towners needing local transportation for a few hours or days, now is moving in on Zipcar and Flexcar. The New York Times has all the details.

Important for us is to see that Hertz has recognized market conditions have changed, fewer people are traveling. They have also redefined their customer from business air travelers and tourists to urban dwellers needing short time-period individual transportation. This service is available in the US in only in New York City and New Jersey (and London and Paris), but with 40,000 cars in NYC versus 1400 cars for Zipcar, the odds are that Hertz can handle the incentory requirements.

The big question for Hertz is how small they can become. Can they match the pick-up and drop off locations? Can they actuallymatch the lightweight aspect of small business? What expectations are attached to the Hertz brand that may not translate well to this new business operating style (i.e., match the time-share mentality with the Hertz delivery)?

This is somewhat similar to Enterprise Car Rental. Their niche was working with auto dealers and repair shops, then they expanded into direct cutomer rentals and used car sales. While Enterprise successfully made the switch, there were some bumps along the way. It will be interesting to watch Hertz navigate similar obstructions.

The lesson for a small business is to keep moving because the elephants, like Hertz, are always shifting. What elephants are in your business segment? The end of the year is a good time to review your market niche and your alternatives for expansion should one of the elephants in your segment shift closer to your niche.